SEC Info

Home

Search

My Interests

Help

Sign In

Please Sign In

  As Of               Filer                 Filing     As/For/On Docs:Pgs              Issuer               Agent

 2/02/07  Fortress Investment Group LLC     S-1/A                 27:1804                                   Capital Printing...01/FA

Document/Exhibit                   Description                      Pages   Size 

 1: S-1/A       Pre-Effective Amendment to Registration Statement   HTML  6,804K 
                          (General Form)                                         
 2: EX-1.1      Form of Underwriting Agreement                      HTML    130K 
 3: EX-3.2      Cert. of Amndmnt. to Cert. of Form. of the Rgstnt.  HTML     11K 
 4: EX-3.3      2nd Amended &Amp; Restated Limited Liability        HTML    401K 
                          Agreement                                              
 5: EX-4.1      Specimen Cert Evidencing Registrant's Class A Shrs  HTML      8K 
 6: EX-4.2      Form of Sharehdrs. Agr. by and Amg. the Registrant  HTML    157K 
 7: EX-5.1      Opin. of Skadden, Arps, Slate, Meagher &Amp; Flom   HTML     15K 
                          Llp                                                    
 8: EX-10.1     Form of Agreement Among Principals                  HTML     64K 
 9: EX-10.2     Omnibus Equity Incentive Plan                       HTML     92K 
10: EX-10.3     Amended and Restated Tax Receivable Agreement       HTML     97K 
11: EX-10.12    Form of Indemnification Agreement                   HTML     49K 
12: EX-10.17    Amended &Amp; Restated Agreement of Foe I Lp        HTML    215K 
13: EX-10.18    Partnership Agmt Fortress Operating Entity Ii Lp    HTML    212K 
14: EX-10.19    Amended and Restated Agreement of Foe Iii Lp        HTML    211K 
15: EX-10.20    Amnd. &Amp; Restd. Agrmnt. of Principal Holdings I  HTML    213K 
                          Lp                                                     
16: EX-10.21    Third Amendment to Amended &Amp; Restated Credit    HTML     60K 
                          Agr.                                                   
17: EX-10.22    Fourth Amendment to Amended &Amp; Restated Credit   HTML     55K 
                          Agr.                                                   
18: EX-10.23    Form of Exchange Agreement                          HTML     79K 
19: EX-10.24    Employment Agreement With Dan Bass                  HTML     83K 
20: EX-21.1     List of Subsidiaries                                HTML     54K 
21: EX-23.2     Consent of Ernst &Amp; Young Llp                    HTML     11K 
22: EX-99.1     Consent of Fredric B. Garonzik                      HTML      9K 
23: EX-99.2     Consent of Richard N. Haass                         HTML      9K 
24: EX-99.3     Consent of Douglas L. Jacobs                        HTML      9K 
25: EX-99.4     Consent of Daniel H. Mudd                           HTML      9K 
26: EX-99.5     Consent of Howard Rubin                             HTML      9K 
27: EX-99.6     Consent of Takumi Shibata                           HTML      9K 

As filed with the Securities and Exchange Commission on February 2, 2007

Registration No. 333-138514

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Amendment No. 3
to

FORM S-1

REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

FORTRESS INVESTMENT GROUP LLC

(Exact name of registrant as specified in its charter)

Delaware			6282			20-5837959
(State or Other Jurisdiction of Incorporation or Organization)			(Primary Standard Industrial Classification Code Number)			(I.R.S. Employer Identification No.)
			1345 Avenue of the Americas 46th Floor New York, New York 10105 (212) 798-6100

(Address, Including Zip Code, and Telephone Number, Including Area Code, of Registrant’s
Principal Executive Offices)

Alan Chesick, Esq.
General Counsel
Fortress Investment Group LLC
1345 Avenue of the Americas
46^th Floor
New York, New York 10105
(212) 798-6100

(Name, Address, Including Zip Code, and Telephone Number, Including Area Code, of Agent For Service)

			Copies to:
Joseph A. Coco, Esq. Skadden,   Arps,  Slate,  Meagher  &  Flom  LLP Four Times Square New York, New York 10036-6522 (212) 735-3000						Edward F. Petrosky, Esq. J. Gerard Cummins, Esq. Sidley Austin LLP 787 Seventh Avenue New York, New York 10019 (212) 839-5300

Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this registration statement.

If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.   

If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of earlier effective registration statement for the same offering.

If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.

If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities, and we are not soliciting offers to buy these securities, in any state or other jurisdiction where the offer or sale is not permitted.

Subject to completion, dated February 2, 2007.

PROSPECTUS

Fortress Investment Group LLC

34,286,000 Class A Shares
Representing Class A Limited Liability Company Interests

This is the initial public offering of our Class A shares representing Class A limited liability company interests. We are selling all of the Class A shares in this offering. None of our five principals will be selling any shares in this offering.

Prior to this offering there has been no public market for our Class A shares. It is currently estimated that the public offering price per Class A share will be between $16.50 and $18.50. We have applied to list our Class A shares on the New York Stock Exchange under the symbol ‘‘FIG’’.

Our five principals will own all of our outstanding Class B shares representing Class B limited liability company interests upon completion of this offering. Holders of our Class B shares will vote together with holders of our Class A shares on all matters to be voted on by our shareholders generally. All shareholders will be entitled to one vote per share. Accordingly, following this offering, our principals will hold approximately 77.7% of the total combined voting power of our outstanding Class A and Class B shares and will be able to exercise control over all matters requiring shareholder approval. In addition, our principals will have certain approval rights with respect to several extraordinary matters or structural changes. See ‘‘Description of Shares’’ beginning on page  199.

			Per Class A Share			Total
Initial public offering price			$			$
Underwriting discount			$			$
Proceeds to us (before expenses)			$			$

To the extent that the underwriters sell more than 34,286,000 Class A shares, the underwriters have the option to purchase up to an additional 5,142,900 Class A shares from us at the initial public offering price less the underwriting discount.

Investing in our Class A shares involves a high degree of risk. See ‘‘Risk Factors’’ beginning on page 30.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The underwriters expect to deliver the Class A shares against payment in New York, New York on                 , 2007.

Goldman, Sachs & Co.						Lehman Brothers
Banc of America Securities LLC			Citigroup			Deutsche Bank Securities

Bear, Stearns & Co. Inc.     Lazard Capital Markets     Merrill Lynch & Co.     Morgan Stanley     Wells Fargo Securities

                , 2007

As used in this prospectus, unless the context otherwise requires:

‘‘Assets Under Management’’, or ‘‘AUM’’, refers to the assets we manage, including capital we have the right to call from our investors pursuant to their capital commitments to various funds. Our AUM equals the sum of:

	(i)	the net asset value, or ‘‘NAV’’, of our private equity funds plus the capital that we are entitled to call from investors in the private equity funds pursuant to the terms of their capital commitments to those funds;

	(ii)	the NAV of our hedge funds; and

	(iii)	the market capitalization of the common stock of each of our publicly traded alternative investment vehicles, which we refer to as our Castles.

We earn management fees pursuant to management agreements on a basis which varies from Fortress Fund to Fortress Fund (e.g. any of ‘‘net asset value’’, ‘‘capital commitments’’, ‘‘invested equity’’ or ‘‘gross equity’’, each as defined in the applicable management agreement, may form the basis for a management fee calculation). Our calculation of AUM may differ from the calculations of other asset managers and, as a result, this measure may not be comparable to similar measures presented by other asset managers. Our AUM measure includes, for instance, assets under management for which we charge either no or nominal fees, generally related to our principal investments in funds as well as investments in funds by our principals and employees. Our definition of AUM is not based on any definition of assets under management contained in our operating agreement or in any of our Fortress Fund management agreements.

‘‘Fortress’’, ‘‘we’’, ‘‘us’’, ‘‘our’’, and the ‘‘company’’ refer, (i) following the consummation of this offering and related transactions, collectively, to Fortress Investment Group LLC and its subsidiaries, including the Fortress Operating Group and all of its subsidiaries, and, (ii) prior to the completion of this offering and related transactions, to the Fortress Operating Group and all of its subsidiaries, in each case not including funds that, prior to the consummation of this offering, were consolidated funds, except with respect to our historical financial statements and discussion thereof unless otherwise specified.

‘‘Fortress Funds’’ and ‘‘our funds’’ refers to the private investment funds and alternative asset companies which are managed by the Fortress Operating Group.

‘‘Fortress Operating Group’’ refers to the combined entities (which prior to the completion of the Nomura transaction described in ‘‘Prospectus Summary—Nomura Transaction’’ were wholly-owned by our principals) in each of which Fortress Investment Group LLC acquired an indirect controlling interest upon completion of the Nomura transaction.

‘‘principals’’ refers to Peter Briger, Wesley Edens, Robert Kauffman, Randal Nardone and Michael Novogratz, collectively, who prior to the completion of this offering and the Nomura transaction directly owned 100% of the Fortress Operating Group units and following completion of this offering and the Nomura transaction will own approximately 77.7% of the Fortress Operating Group units and all of the Class B shares, representing approximately 77.7% of the total combined voting power of all of our outstanding Class A and Class B shares.

i

PROSPECTUS SUMMARY

This summary highlights information contained elsewhere in this prospectus. This summary sets forth the material terms of this offering, but does not contain all of the information that you should consider before investing in our Class A shares. You should read the entire prospectus carefully, including the section entitled ‘‘Risk Factors’’, our financial statements and the related notes and management’s discussion and analysis thereof included elsewhere in this prospectus, before making an investment decision to purchase our Class A shares. Unless otherwise indicated, the information contained in this prospectus assumes that the underwriters’ option to purchase additional shares is not exercised, assumes that the Class A shares to be sold in this offering are sold at $17.50 per share, the mid-point of the range set forth on the cover page of this prospectus and excludes 102,858 restricted Class A shares and 50,920,503 restricted Class A share units that will be issued to certain employees and directors in connection with this offering.

Our Company

Fortress is a leading global alternative asset manager with approximately $29.9 billion in assets under management as of September 30, 2006. We raise, invest and manage private equity funds, hedge funds and publicly traded alternative investment vehicles. We earn management fees based on the size of our funds, incentive income based on the performance of our funds, and investment income from our principal investments in those funds. We believe our funds have produced consistently superior investment returns. We intend to grow our existing businesses, while continuing to create innovative products to meet the increasing demand of sophisticated investors for superior risk-adjusted investment returns. Investors in the company’s Class A shares should note that:

	•	The company was formed to act as a holding company that will hold interests in a number of limited partnerships we refer to as the Fortress Operating Group. The company and the Fortress principals will share in the profits (and losses) of the Fortress Operating Group in proportion to their ownership interests. Fortress Operating Group units held by the company and the principals will be economically identical in all respects. The principals will receive distributions on their Fortress Operating Group units and will not receive any management fees or incentive fees from our funds.

	•	On January 17, 2007, Nomura Investment Managers U.S.A., Inc., or ‘‘Nomura’’, a subsidiary of Nomura Holdings, acquired for $888.0 million 55,071,450 Class A Shares representing, immediately prior to this offering, 15% of the Fortress Operating Group. The company used the entire proceeds of the issuance to acquire a 15% interest in Fortress Operating Group from Fortress’s principals. Upon completion of this offering, Nomura’s shares will represent approximately 13.7% of the Fortress Operating Group. In connection with the closing, we entered into an Investor Shareholder Agreement pursuant to which we granted Nomura certain demand registration rights. See ‘‘Certain Relationships and Related Party Transactions — Investor Shareholder Agreement.’’

	•	Following the Nomura transaction and this offering, all of Fortress’s business activities will continue to be conducted by, and all of its principal assets will continue to be held by, the Fortress Operating Group.

	•	Upon completion of this offering, Fortress’s principals will directly own approximately 77.7% of the Fortress Operating Group and the holders of Class A shares (including Nomura) will, through their interest in the company, indirectly own approximately 22.3% of the Fortress Operating Group, 8.6% of which will be owned by the public.

	•	The principals’ Fortress Operating Group units, which are non-voting interests, are exchangeable (together with the corresponding Class B shares) on a one-for-one basis into Class A shares.

1

	•	The principals will also own a number of the company’s Class B shares equal to the number of their Fortress Operating Group units. These Class B shares, which have no economic interest in the company, vote together with the Class A shares and will enable the principals to maintain voting and operating control of the company and the businesses we conduct.

Fortress was founded in 1998 as an asset-based investment management firm with a fundamental philosophy premised on alignment of interests with the investors in our funds. Our managed funds primarily employ absolute return strategies; we strive to have positive returns regardless of the performance of the markets. Investment performance is our cornerstone – as an investment manager, we earn more if our investors earn more. In keeping with our fundamental philosophy, we invest capital in each of our businesses. As of September 30, 2006, Fortress’s investments in and commitments to our funds were $495.6 million, consisting of the net asset value of Fortress’s principal investments of $426.9 million, and unfunded commitments to private equity funds of $68.7 million. We make investments in our private equity funds by making capital commitments to the funds when they are raised, which amounts are drawn down over time as investments are made by the funds.

Fortress will be the first global alternative asset manager listed on the New York Stock Exchange (NYSE: FIG). Fortress Operating Group will continue to own all of the businesses created by Fortress since 1998. We believe this offering is a unique opportunity to become aligned with our principals: Wesley Edens, Peter Briger, Robert Kauffman, Randal Nardone and Michael Novogratz. Our principals’ investing success has enabled us to grow rapidly while diversifying our management fee and incentive income streams. Our net income grew from $40.3 million for 2003 to $192.7 million for 2005, a 119% compounded annual growth rate.

We are an intellectual capital business. The management of alternative assets is a highly specialized undertaking that demands talent, skill and experience. Our success depends on our more than 250 investment professionals. With headquarters in New York and affiliate offices in Dallas, San Diego, Toronto, London, Rome, Frankfurt and Sydney, we are well positioned to capitalize on the growing demand for alternative asset management services on a global basis.

We have grown our assets under management significantly, from approximately $1.2 billion as of December 31, 2001 to approximately $29.9 billion as of September 30, 2006, or a 96.8% compounded annual growth rate. We will continue to strategically grow our assets under management and will seek to generate superior risk-adjusted investment returns in our funds over the long term solidifying our status as what we believe to be a best-of-class global alternative asset management enterprise. We are guided by the following key objectives and values:

•	generating top-tier risk-adjusted investment returns;

•	introducing innovative new investment products, while remaining focused on, and continuing to grow, our existing lines of business;

•	maintaining our disciplined investment process and intensive asset management; and

•	adhering to the highest standards of professionalism and integrity.

Why We Are Going Public

In order to maintain and expand our position as a leading global alternative asset manager, we need people, permanence, capital and currency. As a public company, we will be best positioned to meet each of these goals:

•	People — to increase our ability to provide financial incentives to our existing and future employees through the issuance of publicly-traded equity securities that represent the value and performance of the company as a whole. In a highly competitive market for investment professional talent, publicly-traded equity securities provide us with a valuable additional compensation tool;

2

•	Permanence — to solidify our institutional presence as an ‘‘investor.’’ Being a public alternative asset manager will benefit us as institutions and individuals increase the portion of the capital they allocate to us;

•	Capital — to more efficiently access capital that we can use to grow our businesses and create new investment products; and

•	Currency — to provide us with a publicly-traded equity security that we can use to finance future strategic acquisitions.

Our Current Businesses

As of September 30, 2006, we managed approximately $29.9 billion of alternative assets in three core businesses:

Private Equity Funds — a business that manages approximately $17.5 billion of AUM that primarily makes significant, control-oriented investments in North America and Western Europe, with a focus on acquiring and building asset-based businesses with significant cash flows. We also manage a family of ‘‘long dated value’’ funds focused on investing in undervalued assets with limited current cash flows and long investment horizons;

Hedge Funds — a business that manages approximately $9.4 billion of AUM comprised of two business segments: (i) hybrid hedge funds – which make highly diversified investments globally in undervalued and distressed assets, including loans, assets and corporate securities; and (ii) liquid hedge funds – which invest globally in fixed income, currency, equity and commodity markets and related derivatives to capitalize on imbalances in the financial markets; and

Publicly Traded Alternative Investment Vehicles, which we refer to as ‘‘Castles’’ — approximately $3.0 billion of aggregate market capitalization in two publicly traded companies managed by us. The Castles currently invest primarily in real estate and real estate debt instruments.

Our Growth Strategy

Our focus is to create long term value for our shareholders and to grow our dividends on an annual basis. We will raise capital (and correspondingly increase our assets under management) only when we believe appropriate investment opportunities are available. Accordingly, we intend to pursue the following initiatives:

Continue to Generate Strong Investment Performance in our Existing Managed Funds.    We believe the most effective strategy for continuing the growth of our businesses is to align our economic interests with those of our investors and to deliver strong investment performance. Crucial to this strategy is our ability to devote time, attention, energy, resources and expertise to effectively manage our assets under management. In particular, we believe that our highly disciplined investment process, intensive credit analysis and fundamental research, and our ‘‘hands-on’’ approach to asset management and risk management will enable us to continue to create value in and maintain the solid performance of the Fortress Funds.

Selectively Expand our Investment Products.    We intend to raise additional funds within our existing businesses and to selectively diversify our business into new alternative asset strategies. We have a broad base of institutional and high net worth individual investors who have traditionally supported our new business initiatives. We believe opportunities exist to raise capital for infrastructure funds, real estate funds, structured debt products and funds focused on industry or geographic sectors within our investment expertise. In addition, we believe that we are well positioned to explore a number of traditional asset management strategies, such as equity funds, that capitalize on the strengths of our investment professionals.

In addition, we expect that we will be able to selectively and opportunistically pursue acquisitions that will add to our investment team’s expertise and product offerings. We believe a number of

3

smaller, successful alternative asset managers will seek the infrastructure, resources and investor relationships available within a larger, more established and independent alternative asset manager.

Competitive Strengths

By taking advantage of what we perceive as our competitive strengths, we expect to continue to grow our asset management business and consistently deliver superior returns for our investors:

•

Distinguished Investment Track Record.    We believe that our funds have produced superior investment returns consistently, and have earned Fortress a reputation as a top-tier firm that is able to deliver strong and consistent performance across industries, geographic regions and economic cycles. A defining feature of our investing approach has been our ability to deliver these returns while also minimizing the risk of investment loss;

•

Alignment with Our Investors.    In keeping with our fundamental philosophy premised on an alignment of interest with our investors, we invest capital in each of our businesses. As of September 30, 2006, the net asset value of Fortress’s principal investments in, and the amount of our unfunded commitments to, our funds was approximately $495.6 million. We make investments in our funds by making capital commitments to the funds when they are raised, which amounts are drawn down over time as investments are made by the funds. In addition, a significant portion of the compensation of our senior investment professionals is based on the performance of our investment funds;

•

People.    We have assembled a team of more than 250 investment professionals to deliver focused idea generation and execution across our businesses. The team is led by our five principals, who have participated in investment activities together in various capacities for many years. The success and dynamism of the company, and our investment-oriented culture, help us attract and retain the highest quality, result-driven people;

•	Global Platform.    We invest broadly in multiple geographic markets. We believe that our ability to successfully translate our investment strategies into various geographic markets allows us to take advantage of a diverse range of opportunities and provides us with attractive opportunities to deploy capital on behalf of our funds;

•

Dividend Policy.    We intend to pay out quarterly dividends in amounts that reflect management’s view of our financial performance. However, no assurance can be given that any dividends, whether quarterly or otherwise, will or can be paid. We believe that the payment of dividends, and our intent to increase our dividends on a basis commensurate with improvements in the company’s financial performance, will provide transparency to our Class A shareholders and will impose upon us an investment discipline with respect to new products, businesses and strategies;

•

Strong Investor Base with Efficient Distribution. The entities and individuals that invest in our funds, which we refer to as ‘‘our investors,’’ include many of the largest pension funds, university endowments, and financial institutions, as well as individuals. We manage capital for approximately 650 investors in our private equity funds and hedge funds. Many of our investors are invested in multiple Fortress Funds, and have invested in new products at launch. We believe that our deep investor relationships, founded on our consistent performance, disciplined and prudent management of our investors’ capital and emphasis on clear, responsive investor communication, make it easier for us to grow our existing businesses and launch new businesses. In addition, the strong performance of the companies whose initial public offerings we have sponsored, including our Castles and certain portfolio companies of our private equity funds, has earned us brand recognition as a financial sponsor and support among institutional public equity investors, which should positively affect our ongoing ability to capitalize new businesses in the public markets; and

4

•

Long-Standing Relationships. We manage diverse and highly transactional businesses, and therefore we are continuously active in the capital markets on behalf of our funds as both an issuer and investor. We have close relationships with key financing sources and capital market intermediaries that have augmented our ability to execute transactions in various businesses. We have long-standing relationships with business and financial leaders that are also crucial to the success of our transactional businesses.

Distributions to the Principals Prior to this Offering

Prior to the acquisition by Fortress Investment Group LLC of an interest in the Fortress Operating Group in connection with the closing of the Nomura transaction, 100% of the Fortress Operating Group was owned by the principals. Distributions in 2006 to the principals in respect of their Fortress Operating Group units totaled approximately $446.9 million, of which $97.2 million, $109.2 million, $66.4 million, $69.7 million and $104.4 million was distributed to Mr. Briger, Mr. Edens, Mr. Kauffman, Mr. Nardone and Mr. Novogratz, respectively. These distributions include a portion of the proceeds from the collection of receivables reflected on our pro forma balance sheet as of September 30, 2006 as ‘‘Due from affiliates’’ relating to previously earned fees. See footnote (b) in ‘‘Unaudited Pro Forma Financial Information’’ which discusses the portion of the proceeds from the collection of such receivables to be distributed to the principals.

Fortress Operating Group also made additional distributions to the principals in 2007, prior to the completion of the Nomura transaction, in an amount totaling approximately $409.2 million, of which approximately $372.2 million represented the remaining value of the net proceeds of the collection of these receivables for fees earned in prior periods, including increases in the amount of such receivables for the period between October 1, 2006 through the estimated date of distribution. Of such additional distributions, $98.1 million, $95.1 million, $63.8 million, $59.4 million and $92.8 million was distributed to Mr. Briger, Mr. Edens, Mr. Kauffman, Mr. Nardone and Mr. Novogratz, respectively. The principals will not receive following completion of this offering, any such distributions relating to fees earned prior to this offering.

In addition, we expect that the Fortress Operating Group will distribute to its partners, including the principals and the intermediate holding companies, an aggregate amount corresponding to a $22.8 million dividend on the Class A shares on a diluted basis for each month for the period beginning January 17, 2007 through completion of this offering (prorated for any partial month). Holders of our diluted Class A shares (that is, outstanding Class A shares assuming the exchange of all of the Fortress Operating Group units held by the principals for Class A shares) prior to completion of this offering, namely the principals and Nomura, will receive these distributions based on their relative percentage ownership of Fortress for the period prior to completion of this offering. These distributions will result in Nomura receiving for each month it has held its Class A shares a dividend of approximately $0.06 per Class A share (prorated for any partial month) prior to completion of this offering. These dividends will be paid using cash on hand and may not be indicative of the amount of any future dividends. Purchasers in this offering will not be entitled to receive these dividends.

You should note that the $888.0 million in proceeds resulting from Nomura’s acquisition of its Class A shares was paid to the principals for Fortress Operating Group units and the company did not retain any portion of this $888.0 million.

The principals do not hold (and have not held) in any personal capacity any portion of the right to receive incentive income, or ‘‘carried interest’’, in any fund managed by Fortress and the Fortress Operating Group will not be distributing or otherwise transferring prior to completion of this offering to the principals any such carried interest. The right of a general partner or an investment manager of a fund to receive incentive income, or performance fees, from the fund based on the fund’s performance is often referred to in the alternative asset management industry as the ‘‘carried interest’’ in the fund. A central premise of the principals’ decision to enable public investors to participate in Fortress’s business — by creating a public company that would, through the intermediate holding

5

companies, become a partner in the Fortress Operating Group — is that the entirety of their business interests should be owned by the investment management business in which the public is, indirectly, investing. Accordingly, for a variety of reasons, the principals determined that the Fortress Operating Group would continue to hold the entirety of the carried interests of each Fortress-managed fund in which the principals have an economic interest, including all fully invested private equity funds.

The net proceeds of this offering are being used as described in ‘‘Use of Proceeds’’ and are not being distributed to the principals or to Nomura.

Deconsolidation of the Fortress Funds

Investors in Class A shares should note that a large number of significant Fortress Funds have historically been consolidated under GAAP into Fortress’s financial statements, notwithstanding that Fortress has only a minority interest in these funds. As of September 30, 2006, the assets of Fortress Funds consolidated on our balance sheet were $17.7 billion, while the net asset value of Fortress’s principal investments in these consolidated funds was approximately $400.2 million. Consequently, Fortress’s historical financial statements do not reflect the net asset value of Fortress’s principal investments in such funds, but reflect rather the assets, liabilities, revenues, expenses and cash flows of these consolidated Fortress Funds on a gross basis. All management fees and incentive income earned by Fortress from these funds were eliminated as a result of the consolidation of these funds and are reflected on Fortress’s historical financial statements as an increase in Fortress’s allocated share of the net income from these funds.

The company believes that continued consolidation of these funds and elimination, from a financial statement point of view, of a significant portion of its management fee and incentive income revenues results in a presentation of the results of operations of its investment management businesses that differs significantly from the manner in which management evaluates these results of operations. Accordingly, in connection with this offering, each Fortress subsidiary that acts as a general partner of a consolidated Fortress Fund will grant rights to the investors in the fund to provide that a simple majority of the fund’s unrelated investors will be able to liquidate the fund, without cause, in accordance with certain procedures. The granting of these rights will lead to the deconsolidation of the Fortress Funds from our financial statements. For a detailed description of the effects of deconsolidation on our financial statements, see ‘‘Unaudited Pro Forma Financial Information’’.

Since the investors’ interests in these funds, reflected as ‘‘non-controlling interests in consolidated subsidiaries’’ on our historical balance sheets and as ‘‘non-controlling interests in income of consolidated subsidiaries’’ on our historical income statements, will also be eliminated in connection with the deconsolidation, there will be no change in either our equity or net income as a result of the deconsolidation. See ‘‘Unaudited Pro Forma Financial Information.’’

6

Structure and Formation of our Company

The diagram below depicts our organizational structure immediately after the consummation of the Nomura transaction, this offering and related transactions. See ‘‘Our Structure — The Transactions’’.

(1)

Investors in this offering will hold 38.4% of the Class A shares, which represent approximately 8.6% of the total combined voting power in Fortress Investment Group LLC and Nomura will hold 61.6% of the Class A shares, which represent approximately 13.7% of the total combined voting power in Fortress Investment Group LLC. These shares represent collectively approximately 22.3% of the Fortress Operating Group units.

(2)	The principals hold 100% of the Class B shares, which represent approximately 77.7% of the total combined voting power in Fortress Investment Group LLC. The Class B shares have no economic interest in Fortress Investment Group LLC.

(3)	Represents approximately 22.3% of the limited partner interests (voting) and a 100% general partner interest in each of the Operating Entities and in Principal Holdings.

(4)	Represents approximately 77.7% of the limited partner interests (non-voting) in each of the Operating Entities and in Principal Holdings.

(5)	Excludes the effect of (i) equity interests to be granted under our equity incentive plan to employees and directors in connection with this offering and (ii) the issuance of Class A shares upon the exercise of the underwriters’ option to purchase additional shares, if applicable.

7

Assuming the issuance of Class A shares upon the full exercise of the underwriters’ option to purchase additional shares and the vesting of the grant of equity interests to employees and directors under our equity incentive plan of equity interests representing 11.1% of the Class A shares on a fully diluted basis, then, (i) Fortress Investment Group LLC would indirectly own approximately 31.8% of the limited partner interests in the Fortress Operating Group, (ii) investors in this offering would hold approximately 8.6% of the Class A shares on a fully diluted basis and (iii) the principals would hold approximately 68.2% of the limited partner interests in the Fortress Operating Group.

Fortress Investment Group LLC, or the public company.    As a result of the transactions contemplated by this offering and the Nomura transaction, we will become the owner of, and the Class A shareholders (including Nomura and investors in this offering) will therefore have an approximately 22.3% economic interest in the Fortress Operating Group, while the principals will retain an approximately 77.7% economic interest in, the Fortress Operating Group as well as voting and operating control of the public company. You should note, in particular, that:

	•	Investors in this offering will own 38.4% of the Class A shares of the public company, which represent 38.4% of the economic interest in the public company but only approximately 8.6% of the voting power of the public company’s shares and 8.6% of the economic interest in the Fortress Operating Group. Nomura will own 61.6% of the Class A shares of the public company, which represents 61.6% of the economic interest in the public company and approximately 13.7% of the combined voting power of the public company’s shares and 13.7% of the economic interest in the Fortress Operating Group.

	•	The public company will own, in turn, through two newly formed wholly-owned subsidiaries, which we refer to as our ‘‘intermediate holding companies’’, approximately 22.3% of the Fortress Operating Group units. The public company will also control the Fortress Operating Group by means of general partner interests in the Fortress Operating Group entities which will be owned by these holding companies.

	•	The principals will own 100% of the public company’s Class B shares, which will vote together with the Class A shares on a one vote per share basis, and which will represent upon completion of this offering approximately 77.7% of the combined voting power of the public company’s shares. The Class B shares do not represent an economic interest in the public company and are therefore not entitled to any dividends. The principals will control the public company since the Class B shares represent more than a majority of the combined voting power in the public company. The voting rights of the principals are further enhanced by the shareholders agreement, described below under ‘‘Certain Relationships and Related Party Transactions — Shareholders Agreements’’.

	•	While the Class B shares, as indicated above, have no economic interest in Fortress, each holder of a Class B share also owns an economic interest in Fortress via a corresponding Fortress Operating Group unit.

	•	The principals’ Fortress Operating Group units, described below, are exchangeable (together with the corresponding Class B shares) on a one-for-one basis for Class A shares. However, the exchange of Fortress Operating Group units for Class A shares will not affect the principals’ voting power since the votes represented by the cancelled Class B shares will be replaced with the votes represented by the Class A shares for which such units are exchanged.

Fortress Operating Group — the limited partnerships operating Fortress’s businesses.    The Fortress Operating Group comprises:

	•	the limited partnerships through which the principals currently operate our business; we refer to these entities as the ‘‘Operating Entities’’; and

	•	one or more limited partnerships formed for the purpose of, among other activities, holding certain of our principal investments; we refer to these entities as ‘‘Principal Holdings’’.

8

We have historically used multiple Operating Entities to segregate operations for business, financial and other reasons. Going forward, we may increase or decrease the number of our Operating Entities or Principal Holdings, based on our views regarding the appropriate balance between (a) administrative convenience and (b) continued business, financial, tax and other optimization. As described more fully below, all of our interests in the Operating Entities will be held through FIG Corp.

We refer to the Operating Entities and Principal Holdings together as the Fortress Operating Group. Each of the Fortress Operating Group entities is a limited partnership. Each Fortress Operating Group unit represents one limited partner interest, or LP interest, in each Operating Entity and in Principal Holdings. A Fortress Operating Group unit is not a legal interest but is the term we use to refer to the aggregate of one LP interest in each Fortress Operating Group entity.

The number of Fortress Operating Group units we will own equals the number of our outstanding Class A shares, while the number of Fortress Operating Group units which the principals will own equals the number of outstanding Class B shares they hold. The economic interest represented by each Fortress Operating Group unit corresponds, in other words, to one of our shares; and the total number of Fortress Operating Group units owned by us and the principals equals the sum of our outstanding Class A shares and Class B shares. We will own our Fortress Operating Group units through our intermediate holding companies, and the principals will own their Fortress Operating Group units directly. In addition, you should note that:

	•	Under the terms of the company’s operating agreement, the Class B shares cannot be transferred except in connection with a transfer of the corresponding Fortress Operating Group unit. Further, as described below, a Fortress Operating Group unit cannot be exchanged for a Class A share without the corresponding Class B share being delivered together with such unit at the time of exchange for cancellation by the company.

	•	We do not intend to list the Class B shares on any stock exchange.

The Intermediate Holding Companies and Control of Fortress Operating Group. Fortress Investment Group LLC, the public company, will own 100% of:

	•	FIG Corp. which in turn will own the sole general partner interest and approximately 22.3% of the LP interests in the Operating Entities; and

	•	FIG Asset Co. LLC which in turn will own the sole general partner interest and approximately 22.3% of the LP interests in Principal Holdings.

The LP interests in the Operating Entities and Principal Holdings that will be held by both FIG Corp. and FIG Asset Co. LLC represent, together, approximately 22.3% of the Fortress Operating Group units.

The general partner interests of each of the Fortress Operating Group entities, which will be held by FIG Corp. and FIG Asset Co. LLC, possess no economic interest in such entities and are not entitled to any allocation of gains or losses of, or any distributions from, the Fortress Operating Group. However, under the limited partnership agreements of each of the Fortress Operating Group entities, management and control rights will be vested in these general partner interests. Accordingly, since our wholly-owned intermediate holding companies will own 100% of the general partner interests in the Fortress Operating Group entities, we will control Fortress Operating Group. While the LP interests in the Fortress Operating Group entities which the principals own have no voting rights, the principals will control us through their ownership of the Class B shares.

9

Allocation of Net Proceeds of this Offering and the Intermediate Holding Company Demand Note.     As described below, we will allocate a portion of the net proceeds of this offering to each of FIG Corp. and FIG Asset Co. LLC, based on the aggregate values of the Operating Entities, on the one hand, and the value of Principal Holdings plus an amount equal to $70 million, on the other.

	•	FIG Asset Co. LLC will contribute to Principal Holdings a portion of the net offering proceeds allocated to it, and to the extent that FIG Asset Co. LLC does not have an immediate need for the balance of such proceeds, it will loan the balance to FIG Corp. pursuant to a demand note. FIG Asset Co. LLC may from time to time demand the repayment of all or a portion of this loan to fund additional investments in Principal Holdings or for other purposes.

	•	FIG Corp. will contribute its portion of the net offering proceeds allocated to it, plus the proceeds of any demand loan received from FIG Asset Co. LLC, to the Operating Entities, based on their relative values.

Amounts contributed by FIG Asset Co. LLC to Principal Holdings and by FIG Corp. to the Operating Entities upon completion of this offering will dilute the percentage ownership interests of the principals in those entities by approximately 8.6%. The relative percentage ownership interests in Fortress Operating Group of the public company on the one hand and the principals on the other will continue to change over time, as follows:

	•	whenever we issue Class A shares to raise capital, we will contribute the proceeds of any such capital raise, via the intermediate holding companies, to Fortress Operating Group entities and each such contribution by us will dilute the principals’ direct percentage ownership therein;

	•	whenever we grant any awards under our equity incentive plan, (i) in the case of Fortress Operating Group units, we will issue a corresponding number of Class B shares and (ii) in the case of all other awards, each of the Operating Entities and Principal Holdings will make comparable awards, in the same amounts, to our intermediate holding companies, FIG Corp. and FIG Asset Co. LLC; and

	•	whenever the principals exchange their Fortress Operating Group units for Class A shares, our ownership interest in the Fortress Operating Group will increase and the principals’ direct ownership interest will decrease correspondingly.

Following this offering, as a result of these contributions, FIG Corp. will own 22.3% and the principals will own 77.7% of the LP interests in each of the Operating Entities, and FIG Asset Co. LLC will own 22.3% and the principals will own 77.7% of the LP interests in Principal Holdings.

Certain Attributes of our Structure.    Our structure is designed to accomplish a number of objectives, the most important of which are as follows:

	•	We are a holding company that will be qualified as a partnership for U.S. federal income tax purposes. Our intermediate holding companies will enable us to maintain our partnership status.

	•	The interposition of our intermediate holding companies will allow the company to serve as a public holding company with its Class A shares widely held and actively traded. The principals, however, will retain their economic investment in the form of direct interests in the Fortress Operating Group, rather than in the Class A shares. All of the businesses operated by Fortress prior to the closing of the Nomura transaction and this offering, and all of the interests held by Fortress in such businesses prior to the closing of the Nomura transaction and this offering, will continue to be operated or held, as the case may be, by the Fortress Operating Group following the closing of the Nomura transaction and this offering, and the principals will retain their remaining economic interests in these businesses through their ownership interests in the Fortress Operating Group entities. Although distributions on the

10

		Fortress Operating Group units must be made on a pro rata basis, the principals will receive their distributions directly, while the same distribution must first be made to FIG Corp. and FIG Asset Co. LLC before any amounts, net of taxes, debt service payments and payments under the tax receivable agreement (as described below), can be distributed to us, and in turn to the Class A shareholders.

	•	Although the principals currently own no economic interest in Fortress Investment Group LLC (that is, they own no Class A shares), they will own non-economic Class B ‘‘vote-only’’ shares that as a percentage of the combined voting power of our shares will be commensurate with their economic ownership in Fortress Operating Group.

	•	In the event a principal wishes to exchange Fortress Operating Group units for Class A shares, he must deliver the units to us together with a corresponding number of Class B shares, and as a result of the exchange:

	•	we will deliver to the principal a number of Class A shares corresponding to the number of Fortress Operating Group units delivered to us;

	•	we will cancel the Class B shares delivered to us; and

	•	the Fortress Operating Group units we acquire from the principal will be held by our intermediate holding companies, FIG Corp and FIG Asset Co. LLC, as applicable.

Summary.    Following the transactions contemplated by this offering and the Nomura transaction:

	•	the public company (through the intermediate holding companies) and the principals (through direct ownership) will hold, respectively, approximately 22.3% and approximately 77.7% of the Fortress Operating Group units;

	•	the Class A shareholders’ voting and economic interests in Fortress will be represented by their Class A shares in the public company. The principals’ economic interests, by comparison, will be represented by their Fortress Operating Group units while their voting interests will be represented by their Class B shares in the public company;

	•	the Class A shares held by Nomura represent, on a per share basis, the same economic and voting interest in the public company as the Class A shares to be issued in connection with this offering. However, Nomura has additional rights pursuant to its shareholder agreement with the public company, including its right to designate a member of the public company’s board of directors. See ‘‘Certain Relationships and Related Party Transactions — Investor Shareholder Agreement’’;

	•	all of the businesses engaged in by Fortress as a historical matter will continue, following completion of this offering, to be conducted by the Fortress Operating Group; accordingly, Fortress Investment Group LLC, the public company, and the principals will participate in the net operating results of the Fortress Operating Group, which are derived largely from the management fees and incentive income from the Fortress Funds, on a pari passu basis, in accordance with their pro rata ownership of Fortress Operating Group units;

	•	the principals will retain voting control of Fortress Investment Group LLC following this offering through their ownership of our Class B shares; and

	•	future issuances, if any, of Class A shares will result in a corresponding increase in the number of Fortress Operating Group units held by the intermediate holding companies and result in a corresponding dilution of the principals’ percentage ownership interest in the Fortress Operating Group.

The Transactions

Our business is presently conducted by Fortress Operating Group. Fortress Investment Group LLC was formed as a Delaware limited liability company for the purpose of completing the Nomura

11

transaction, this offering and the related transactions in order to carry on our business as a publicly-traded entity. As a result of the Nomura transaction and the transactions contemplated by this offering, Fortress Investment Group LLC will acquire control of the Fortress Operating Group and hold approximately 22.3% of the Fortress Operating Group units.

In connection with the closing of the Nomura transaction, we formed FIG Corp. as a Delaware corporation and FIG Asset Co. LLC as a Delaware limited liability company, our two wholly-owned intermediate holding companies. In connection with the consummation of this offering, we have completed or will complete the following transactions:

	•	we will grant rights to the investors in the consolidated Fortress Funds to provide a simple majority of the respective limited partners with the right to accelerate the date on which the fund is liquidated, without cause, in accordance with certain procedures, or otherwise with the ability to exert control over the fund, which will result in our deconsolidation of these funds as of the date of grant;

	•	subsequent to September 30, 2006, we distributed $528.5 million to our principals in the period prior to the consummation of this offering;

	•	we collected $469.2 million pursuant to certain contractual arrangements from our offshore hedge funds representing a portion of receivables relating to previously earned fees, of which $435.0 million is reflected on our pro forma September 30, 2006 balance sheet, and used the proceeds, net of non-controlling interests, to partially fund the distributions to our principals described immediately above;

	•	we issued Class A shares to Nomura for net proceeds of $888.0 million;

	•	we contributed $609.8 million of the net proceeds from the Nomura transaction to FIG Corp. which will in turn use those net proceeds, together with the proceeds it receives from FIG Asset Co. LLC under a demand note, as described below, to purchase from the principals a 15% limited partner interest in each of the Operating Entities (which will be approximately 13.7% upon consummation of this offering). In connection with its admission as a limited partner to the Operating Entities, FIG Corp. also became the sole general partner in each Operating Entity;

	•	we contributed $278.2 million of the net proceeds from the Nomura transaction to FIG Asset Co. LLC, which will (i) loan a portion of these net proceeds to FIG Corp. pursuant to a demand note and (ii) use the remaining portion of these proceeds to purchase from the principals a 15% limited partner interest in Principal Holdings (which will be approximately 13.7% upon consummation of this offering), the Fortress Operating Group entity which, among other things, will hold certain of our principal investments. In connection with its admission as a limited partner to Principal Holdings, FIG Asset Co. LLC also became the sole general partner in Principal Holdings;

	•	we entered into an Investor Shareholder Agreement with Nomura, as described below;

	•	FIG Corp. and FIG Asset Co. LLC (on behalf of any affiliated corporation) entered into a tax receivable agreement with our principals, as described below;

	•	we entered into an employment agreement with each of our principals, as described below;

	•	we will issue Class A shares in this offering for net proceeds of approximately $533.0 million (based on the mid-point of the range set forth on the cover page of this prospectus);

	•	we expect to contribute $383.0 million of the net proceeds from this offering to FIG Corp. which will in turn contribute those net proceeds, together with the proceeds it receives from FIG Asset Co. LLC under a demand note, as described below, to the Operating Entities in exchange for an additional approximately 8.6% limited partner interest in each of the Operating Entities;

12

	•	we expect to contribute $150.0 million of the net proceeds from this offering to FIG Asset Co. LLC, which will (i) loan a portion of these net proceeds to FIG Corp. pursuant to a demand note and (ii) contribute the remaining portion of these proceeds in exchange for an additional approximately 8.6% limited partner interest in Principal Holdings;

	•	Fortress Operating Group will apply the net proceeds from this offering: (a) to pay $250 million outstanding under our term loan facility, (b) to pay $85 million currently outstanding under our revolving credit facility, (c) to fund $169 million of commitments to existing private equity funds and (d) to use $29 million for general business purposes.

	•	we will grant pursuant to our equity incentive plan, effective upon consummation of this offering, restricted Class A shares and restricted Class A share units to certain directors and employees having a fair value of $1.8 million and $870.4 million, respectively, based on the mid-point of the price range set forth on the cover page of this prospectus;

	•	we will enter into a shareholders agreement with our principals, and our principals will enter into the principals agreement, in each case as described below;

	•	we refinanced our credit agreement in June 2006 and as of September 30, 2006 had borrowed $600 million under the term loan facility portion thereof (which includes $250 million which is to be paid as described above); and

	•	we expect to distribute $208.5 million in relation to the liquidation of Northcastle Trust (a Fortress Fund) or ‘‘Northcastle’’, to its investors; as of November 30, 2006 the liquidation was substantially complete.

We refer to the foregoing collectively as the ‘‘Transactions.’’

As a result of the Transactions:

•	Fortress Investment Group LLC will be a holding company, and our primary assets will be our indirect controlling general partner interest in the Fortress Operating Group and approximately 22.3% of the Fortress Operating Group units, held through the intermediate holding companies;

•	our principals’ percentage ownership of the Fortress Operating Group units will decrease to approximately 77.7% and our principals’ Class B shares will represent 77.7% of the total combined voting power in the public company, by means of which they will maintain control of the public company;

•	FIG Corp. or FIG Asset Co. LLC, as applicable, became the sole general partner of each of the entities that constitute the Fortress Operating Group. Accordingly, we will operate and control the business of the Fortress Operating Group and its subsidiaries; and

•

net profits, net losses and distributions of the Fortress Operating Group will be allocated and made to its unitholders, on a pro rata basis in accordance with their respective Fortress Operating Group units. Accordingly, net profits and net losses allocable to Fortress Operating Group unitholders will initially be allocated, and distributions will initially be made, approximately 22.3% indirectly to us and approximately 77.7% to our principals.

The Transactions were or will be effected for a variety of reasons, including the following:

	•	The deconsolidation of the Fortress Funds will, we believe, result in our financial statements reflecting our investment management business, including our management fee and incentive income revenues, in a manner that we believe more closely reflects both the manner in which our management evaluates our business and the risks of the assets and liabilities of the public company.

	•	We will distribute the proceeds of the collection of receivables from our offshore hedge funds relating to previously earned fees and certain other amounts specified above to the principals prior to the completion of this offering.

13

	•	One of the primary reasons we are going public is to increase our ability to retain our existing employees by means of grants of equity interests in Fortress, as reflected by equity grants we expect to make to employees in connection with this offering.

	•	In addition to our operating agreement, the agreements to which our principals are party — the principals agreement, the shareholders agreement, the tax receivable agreement and their individual employment agreements - reflect the terms of our relationship with the principals as well as their relationship among themselves, in light of Fortress’s transition from a private enterprise owned by five individuals to a public enterprise in which a variety of stakeholders have interests.

	•	We refinanced our credit agreement in June 2006 in connection with our continuing growth to provide additional borrowing capacity to enable us to make principal investments in new or existing Fortress Funds and to effect a $250.0 million distribution to the principals.

	•	Our determination not to proceed with a public market capitalization of Northcastle in light of market conditions in Canada resulted, in the fourth quarter of 2006, following an assessment of various factors, in our determination to liquidate Northcastle Trust and return investor capital.

	•	The remaining Transactions collectively comprise the reorganization pursuant to which the principals, Nomura and the public will acquire 100% of our outstanding Class A and Class B shares, and our concurrent acquisition, through two intermediate holding companies, of the controlling general partner interest in the Fortress Operating Group and approximately 22.3% of the Fortress Operating Group units.

As we are a newly formed company, Fortress Operating Group is considered our predecessor for accounting purposes, and its combined financial statements will be our historical financial statements following completion of the Transactions. Also, because the principals control Fortress Operating Group before the Transactions and will control us after the Transactions, the Transactions are to be accounted for as a reorganization of entities under common control. Accordingly, we will carry forward unchanged the value of assets and liabilities recognized in Fortress Operating Group’s combined financial statements into our consolidated financial statements. Following completion of this offering, substantially all of Fortress’s expenses (other than (i) income tax expenses of Fortress Investment Group LLC, FIG Corp. and FIG Asset Co. LLC, (ii) obligations incurred under the tax receivable agreement and (iii) payments on indebtedness incurred by Fortress Investment Group LLC, FIG Corp. and FIG Asset Co. LLC), including substantially all expenses incurred by or attributable solely to Fortress Investment Group LLC, such as expenses incurred in connection with this offering, will be accounted for as expenses of the Fortress Operating Group.

We generally intend to hold all our assets through the Fortress Operating Group. In the future, if we make a significant tax-free corporate acquisition, we may add additional intermediate holding companies in the event we are unable to effect such acquisition through the Fortress Operating Group because of various business, financial or tax constraints.

Class A Shares.    Immediately following this offering, 38.4% of our outstanding Class A shares will be owned by purchasers in this offering and 61.6% of our outstanding Class A shares will be owned by Nomura. Holders of Class A shares will be entitled to one vote per share on all matters submitted to a vote by our shareholders. Holders of our Class A shares and our Class B shares will vote together as a single class on all matters submitted to a vote of our shareholders. Class A shares owned by purchasers in this offering will initially represent approximately 8.6% of the total combined voting power of our outstanding Class A and Class B shares and Class A shares owned by Nomura, upon consummation of this offering, will represent 13.7% of the total combined voting power of our outstanding Class A and Class B shares. As a result, our principals will exercise control over all matters requiring shareholder approval and certain other matters described below.

Class B Shares.    Immediately following this offering, all of our outstanding Class B shares will be owned by our principals. Holders of Class B shares will be entitled to one vote per share. Holders of

14

our Class A shares and our Class B shares will vote together as a single class on all matters submitted to a vote of our shareholders. The Class B shares will have no economic rights and are not entitled to any dividends, although they will initially represent approximately 77.7% of the total combined voting power of our outstanding Class A and Class B shares. As a result, our principals will be able to exercise control over all matters requiring shareholder approval. In addition, our principals will have additional approval rights under the shareholders agreement described below.

Exchange of Fortress Operating Group Units.    Immediately after this offering, the principals will own 77.7% of the outstanding Fortress Operating Group units, which will be non-voting but will represent 77.7% of the equity interest in the Fortress Operating Group. In connection with the completion of this offering, the principals will enter into an exchange agreement with us under which at any time and from time to time, each principal (or certain transferees thereof) will have the right to exchange one of their Fortress Operating Group units (together with the corresponding Class B share) for one of our Class A shares. Under the exchange agreement, to effect an exchange, a principal must simultaneously exchange one Fortress Operating Group unit – being an equal limited partner interest in each Fortress Operating Group entity. In connection with any exchange of Fortress Operating Group units, the principal will receive a right, under a tax receivable agreement described below, to receive 85% of the value of the applicable tax benefit in cash when FIG Corp. or FIG Asset Co. LLC (on behalf of any affiliated corporation that holds an interest in a Fortress Operating Group entity) (the ‘‘corporate taxpayers’’) actually realizes certain tax savings. These tax savings would result from the increase in the tax basis of the assets of certain Fortress Operating Group entities, which would lead to an increase in depreciation and amortization deductions or reduced gains on sales and imputed interest expense deductions. A principal may also elect to exchange his Fortress Operating Group units in a tax-free transaction where the principal is making a charitable contribution. In such case, we will not obtain an increase in the tax basis of the assets of the Fortress Operating Group entities and no payments will be required to be made pursuant to the tax receivable agreement because there will be no tax savings realized. As a principal exchanges his Fortress Operating Group units, our interest in the Fortress Operating Group units will be correspondingly increased and his corresponding Class B shares will be cancelled. We have reserved for issuance 312,071,550 Class A shares, corresponding to the number of existing Fortress Operating Group units held by our principals.

Tax Receivable Agreement.    In connection with the closing of the Nomura transaction, the corporate taxpayers entered into a tax receivable agreement with our principals. Upon the occurrence of a taxable exchange by a principal of his Fortress Operating Group units for Class A shares, the corporate taxpayers’ share of the depreciation, amortization and interest expense tax deductions, as well as an increase in the tax basis of other assets, of certain Fortress Operating Group entities resulting from the exchanged units, may be larger than they would have been had such units been acquired in a non-taxable exchange. Additionally, our acquisition of Fortress Operating Group units from the principals, such as in the Nomura transaction, also will result in increases in tax deductions and tax basis that would reduce the amount of tax that the corporate taxpayers would otherwise be required to pay in the future. Because these increases in tax deductions, as well as the increase in the tax basis of other assets, would not otherwise have been available to, and would reduce the tax liability of, the corporate taxpayers, the corporate taxpayers will be required to make payments to the exchanging or selling principal equal to 85% of the resulting tax savings as and when realized by the corporate taxpayers. The payments that the corporate taxpayers may make to our principals could be material in amount and will be an obligation of our intermediate holding companies and not the Fortress Operating Group. The corporate taxpayers will benefit from the remaining 15% of the tax savings realized. In general, estimating the amount of payments that may be made to the principals under the tax receivable agreement is by its nature, imprecise, in the absence of an actual transaction, insofar as the calculation of amounts payable depends on a variety of factors. The actual increase in tax basis and the amount and timing of any payments under the tax receivable agreement will vary depending upon a number of factors, including:

15

•	the timing of the transactions — For instance, the increase in any tax deductions will vary depending on the fair market value, which may fluctuate over time, of the depreciable or amortizable assets of the Fortress Operating Group entities at the time of the transaction;

•	the price of our Class A shares at the time of the transaction — The increase in any tax deductions, as well as tax basis increase in other assets, of the Fortress Operating Group entities, is directly proportional to the price of the Class A shares at the time of the transaction;

•	the taxability of exchanges — If an exchange is not taxable for any reason, increased deductions will not be available; and

•	the amount and timing of our income — The corporate taxpayers will be required to pay 85% of the tax savings as and when realized, if any. If a corporate taxpayer does not have taxable income, the corporate taxpayer is not required to make payments under the tax receivable agreement for that taxable year because no tax savings were actually realized.

The occurence of an actual transaction in which Fortress Operating Group units are exchanged or purchased will permit us to make a number of actual determinations. For instance, the Nomura transaction would have resulted, if it had occurred on September 30, 2006, in an increase in the tax basis of the assets owned by the Fortress Operating Group at the date of the purchase of approximately $945.2 million and likely will result in us making payments under the tax receivable agreement. Any payments under the tax receivable agreement will give rise to additional tax benefits and additional potential payments under the tax receivable agreement. Any payments under the tax receivable agreement will depend upon whether FIG Corp. has taxable income to utilize the benefit of the increase in the tax basis of the assets owned by the Fortress Operating Group. For additional information regarding the impact of the Nomura transaction on our unaudited pro forma balance sheet as of September 30, 2006, see footnote (d) of ‘‘Unaudited Pro Forma Financial Information.’’

In addition, the tax receivable agreement provides that, upon a merger, asset sale or other form of business combination or certain other changes of control, the corporate taxpayers’ (or their successors’) obligations with respect to exchanged or acquired units (whether exchanged or acquired before or after such change of control) would be based on certain assumptions, including that the corporate taxpayers would have sufficient taxable income to fully utilize the deductions arising from the increased tax deductions and tax basis and other benefits related to entering into the tax receivable agreement. As noted above, no payments will be made if a principal elects to exchange his Fortress Operating Group units in a tax free transaction.

Shareholders Agreement.    Prior to the consummation of this offering, we will enter into a shareholders agreement with our principals pursuant to which, so long as our principals and their permitted transferees collectively own more than 40% of the total combined voting power of our outstanding Class A and Class B shares, the principals who are then employed by the Fortress Operating Group holding shares greater than 50% of the total combined voting power of all shares held by such principals will have certain approval rights over the following transactions:

•	any incurrence of indebtedness in excess of 10% of our then existing long-term consolidated indebtedness;

•	any issuance by us of equity or equity-related securities that would represent, after such issuance or upon conversion, exchange or exercise, as the case may be, at least 10% of the total combined voting power of our outstanding Class A and Class B shares (except in certain circumstances);

•	any debt or equity investment by us (including any commitment to invest) in an amount greater than $250 million;

•	any entry by us into a new line of business that does not involve investment management and that requires a principal investment in excess of $100 million;

16

•	the adoption of a shareholder rights plan;

•	any appointment of a chief executive officer or co-chief executive officer; or

•	the termination of the employment of a principal with us or any of our material subsidiaries without cause.

The effect of the agreement is that our principals will maintain control over our significant corporate transactions even when they collectively hold less than a majority of the combined total voting power of our Class A and Class B shares. However, although we may qualify as a ‘‘controlled company’’ under the rules of the New York Stock Exchange, we nonetheless intend to comply, upon completion of this offering, with the corporate governance requirements of the NYSE which are applicable to companies that do not qualify as a ‘‘controlled company.’’

The agreement also will prohibit our principals from, directly or indirectly, voluntarily effecting cumulative transfers of specified amounts of their interests in us and the Fortress Operating Group for a period of five years after this offering. The principals may exchange their Fortress Operating Group units for Class A shares at any time, which Class A shares also are subject to the foregoing transfer restrictions. When the principals exchange their Fortress Operating Group units for Class A shares, the Class B shares corresponding to the Fortress Operating Group units will be cancelled. Therefore, the existing Class A shareholders’ ownership percentage of Class A shares will be diluted by an amount equal to the number of Class A shares delivered to the principals upon exchange of Fortress Operating Group units, but their total combined voting power remains unchanged. See ‘‘Certain Relationships and Related Party Transactions — Transfer Restrictions.’’ The agreement also will provide that so long as our principals and their permitted transferees collectively own more than 50% of the total combined voting power of all our outstanding Class A and Class B shares, our board of directors will nominate individuals designated by the principals such that the principals will have six designees (out of a total possible eleven members) to the board and if the principals own more than 10% and equal to or less than 50% of the total combined voting power of our outstanding Class A and Class B shares, our board of directors will nominate individuals designated by the principals such that the principals will have between two and five designees to the board, based on their collective ownership of our outstanding shares.

The shareholders agreement also will provide that we will indemnify our principals in respect of matters relating to private equity fund ‘‘clawback’’ obligations. We earn incentive income — generally 20% of the profits — from each of our private equity funds based on a percentage of the profits earned by the fund as a whole, provided that the fund achieves specified performance criteria. We generally receive, however, our percentage share of the profits on each investment in the fund as it is realized, before it is known with certainty that the fund as a whole will meet the specified criteria. As a result, the incentive income paid to us as a particular investment made by the funds is realized is subject to contingent repayment (or ‘‘clawback’’) if, upon liquidation of the fund, the aggregate amount paid to us as incentive income exceeds the amount actually due to us based upon the aggregate performance of the fund. Since all of the incentive income such funds have paid to date is still subject to clawback, this clawback obligation is approximately $283.6 million as of September 30, 2006, of which $64.0 million related to an unconsolidated private equity fund. The principals have personally guaranteed, subject to certain limitations, this ‘‘clawback’’ obligation. The shareholders agreement contains our agreement to indemnify the principals for all amounts which the principals pay pursuant to any of these personal guaranties in favor of our private equity funds.

In addition, the principals have certain consent rights with respect to structural changes as described under ‘‘Description of Shares — Operating Agreement — Relationship with Fortress Operating Group Entities.’’

Agreement Among Principals.    Prior to the consummation of this offering, the principals will enter into an agreement (the ‘‘Principals Agreement’’) which provides that, in the event a principal voluntarily terminates his employment with us for any reason prior to the fifth anniversary of the

17

consummation of this offering, a portion of the Fortress Operating Group units (and corresponding Class B shares and certain rights under the tax receivable agreement) held by that principal as of the completion of this offering will be forfeited to the principals who are employed by Fortress Operating Group on the date which is the earlier of (i) the date that is six months after such termination of employment and (ii) the date on or after such termination date that is six months after the latest publicly-reported disposition of our equity securities by applicable principals (excluding certain exempt dispositions). The amount of such forfeiture will scale down over the five-year period.

The Principals Agreement may be amended upon the approval of a majority of the principals who are then employed by the Fortress Operating Group. We, our shareholders and the Fortress Operating Group have no ability to enforce any provision thereof or to prevent the principals from amending the Principals Agreement or waiving any forfeiture obligation.

Employment, Non-Competition and Non-Solicitation Agreements.     Prior to the closing of the Nomura transaction, we entered into an employment, non-competition and non-solicitation agreement with each of our principals. Each such agreement will terminate on the fifth anniversary of completion of this offering, subject to automatic yearly renewals, unless either party terminates the agreement in accordance with its terms. The principal’s covenants survive any termination or expiration of the employment agreement. Each principal will be entitled to an annual salary that may be increased, but not decreased, at the discretion of our board of directors. The agreement also requires the principal to protect the confidential information of our company both during and after employment, and refrain from soliciting employees or interfering with our relationships with our investors both during and for a 24-month period after employment. If we terminate a principal’s employment without cause (as defined in the agreement), we will pay the principal a separation payment equal to three times his then-current annual salary and his accrued but unpaid salary and accrued but unused vacation pay through the date of termination of employment. The employment agreement provides that if a principal terminates his employment voluntarily or we terminate his employment with cause, whether during the agreement’s term or thereafter in the event the agreement’s term is not renewed, the principal will be paid his accrued but unpaid salary and accrued but unused vacation pay through the date of termination of employment and will be subject to an eighteen-month post-employment covenant requiring the principal not to compete with us.

Tax Consequences.     Skadden, Arps, Slate, Meagher & Flom LLP has acted as our counsel in connection with this offering. At the closing of this offering, Skadden, Arps, Slate, Meagher & Flom LLP will deliver to us an opinion that, under current law, we will be treated, for U.S. federal income tax purposes, as a partnership and not as an association or a publicly traded partnership taxable as a corporation. Accordingly, holders of Class A shares will be required to report their allocable share of our income for U.S. federal income tax purposes, regardless of whether any cash or other dividends are made to them. See ‘‘Material U.S. Federal Tax Considerations — Taxation of the Company — Federal Income Tax Opinion Regarding Partnership Status’’.

FIG Corp., our wholly-owned subsidiary and general partner of the Fortress Operating Group entities (other than Principal Holdings), will incur U.S. federal, state, local and foreign income taxes on its proportionate share of any net taxable income of such entities.

FIG Asset Co. LLC, our wholly-owned subsidiary and general partner of Principal Holdings, will be, for U.S. federal income tax purposes, an entity disregarded as an entity separate from its owner, and not as an association taxable as a corporation.

Accordingly, income will be allocable to holders of Class A shares as a result of FIG Corp.’s dividends and FIG Asset Co. LLC’s income.

In accordance with the applicable partnership agreement, we will cause the applicable Fortress Operating Group entities to distribute cash on a pro rata basis to holders of Fortress Operating Group units (that is, our intermediate holding companies and the principals) in an amount at least equal to the maximum tax liabilities arising from the ownership of such units, if any, subject to compliance with

18

any financial covenants or other obligations. Since the purpose of such tax distributions is to enable FIG Corp. and the principals to satisfy their respective tax liabilities, no such distribution will necessarily be required to be distributed by our intermediate holding companies to us and there can be no assurance that we will pay cash dividends on the Class A shares in an amount sufficient to cover any tax liability arising from the ownership of Class A shares. The declaration and payment of dividends by us will be at the discretion of our board of directors. A holder of Class A shares will be required to report its share of our taxable income even if the board of directors does not pay dividends.

Nomura Transaction

On December 18, 2006, our principals entered into a securities purchase agreement with Nomura Investment Managers U.S.A., Inc., a Delaware corporation, or Nomura pursuant to which Nomura acquired a 15% stake in Fortress for $888.0 million, on January 17, 2007. In the agreement, our principals agreed to cause us to issue and sell 55,071,450 Class A shares, at a price per share equal to $16.12, to Nomura representing 15% of the outstanding equity interests in the Fortress Operating Group as of the date of the purchase (without giving effect to this offering and the issuance of restricted Class A shares or share units that will be issued to certain employees and directors). We used all of the proceeds from the issuance of Class A shares to Nomura to purchase from the principals 15% of their Fortress Operating Group units through our intermediate holding companies. Upon completion of this offering, the Class A shares purchased by Nomura will represent approximately 61.6% of our issued and outstanding Class A shares and approximately 13.7% of the combined voting power in Fortress Investment Group LLC (without giving effect to any issuances to certain employees and directors). Nomura’s obligations under the securities purchase agreement are guaranteed by its ultimate parent, Nomura Holdings, Inc., a Japanese corporation.

This transaction with Nomura is expected to facilitate the expansion of our business in Asia. In the securities purchase agreement, the parties agreed that during the six months following the date of the agreement, Nomura will work with us in good faith to develop a strategy to market and sell our investment products and once such strategy is formulated, the parties agreed that they will use their respective best efforts to promptly finalize and enter into a mutually satisfactory distribution agreement containing customary terms. However, there is currently no agreement in place with Nomura to market or sell our investment products and we cannot provide any assurances that any agreement will be reached; there will be no changes in Nomura’s rights as a shareholder in the event that no such agreement is reached.

Pursuant to the terms of the securities purchase agreement, each of the principals, severally and not jointly, must indemnify Nomura and its affiliates against losses incurred by Nomura and its affiliates if such principal breaches the representations and agreements he made with respect to himself or Fortress. Nomura must indemnify the principals, subject to certain exceptions, Fortress and their respective affiliates from losses incurred if Nomura breaches its representations or agreements. Each of Nomura and collectively, the principals are required to indemnify each other for the aggregate amount of such losses which, in each case, exceed $10,000,000, up to a cap equal to the purchase price of $888 million. We are not required to indemnify Nomura under the securities purchase agreement or in any way in connection with the Nomura transaction.

Upon consummation of the sale of Class A shares to Nomura, we entered into an Investor Shareholder Agreement with Nomura. The Investor Shareholder Agreement provides Nomura with certain rights with respect to the designation of a nominee to serve on our board of directors or an observer to attend meetings of our board of directors, as well as registration rights for our securities that it owns, and places certain restrictions on actions that Nomura may take with respect to us and our securities. Nomura agreed pursuant to the Investor Shareholder Agreement not to transfer the Class A shares (other than to its controlled affiliates) for a period of one year following the closing of

19

the Nomura transaction. For a more detailed summary of the Investor Shareholder Agreement, see ‘‘Certain Relationships and Related Party Transactions — Investor Shareholder Agreement.’’

Additional Information

Our principal executive offices are located at 1345 Avenue of the Americas, New York, New York 10105. Our telephone number is (212) 798-6100. Our internet address is www.fortressinv.com. Information on our website does not constitute part of this prospectus.

20

THE OFFERING

Shares offered by us in this offering		34,286,000 Class A shares

Shares to be outstanding immediately after this offering:

•	Class A shares		89,357,450 Class A shares

•	Class B shares		312,071,550 Class B shares

Shares to be held by our principals immediately after this offering:

•	Class A shares		none

•	Class B shares		312,071,550 Class B shares

Fortress Operating Group units held

by us		89,357,450 or approximately 22.3%

by our principals		312,071,550 or approximately 77.7%

Voting

•	Class A shares		one vote per share

•	Class B shares		one vote per share

•	Voting Rights		Holders of our Class A shares and Class B shares will vote together as a single class on all matters submitted to our shareholders for their vote or approval. See ‘‘Description of Shares’’.

Approval rights		Our principals will have approval rights with respect to certain extraordinary transactions so long as they and their permitted transferees continue to hold more than 40% of the total combined voting power of our outstanding Class A and Class B shares. See ‘‘Certain Relationships and Related Party Transactions — Shareholders Agreement’’.

Majority independent directors		Immediately preceding the consummation of this offering, a majority of our directors will be ‘‘independent’’ as defined under New York Stock Exchange, or NYSE, rules.

		Our operating agreement provides that the authority and function of our board of directors and officers shall be identical to the authority and functions of a board of directors and officers of a corporation organized under the Delaware General Corporation Law, except as expressly modified by the terms of our operating agreement. See ‘‘Description of Shares — Operating Agreement — Duties of Officers and Directors’’ for details regarding the differences between our operating agreement and

21

		Delaware General Corporation Law with regard to the duties and obligations of our officers and directors.

Use of proceeds		We estimate that the net proceeds from the sale of our Class A shares in this offering, after deducting offering expenses and the underwriting discounts, will be $533 million. We intend to contribute the net proceeds from this offering to the Fortress Operating Group, which in turn will apply those proceeds as follows: (a) to pay $250 million outstanding under our term loan facility, as required by our credit agreement, (b) to pay $85 million currently outstanding under our revolving credit facility, (c) to fund $169 million of commitments to existing private equity funds and (d) to use $29 million for general business purposes.

Cash dividend policy		We intend to pay quarterly dividends on our Class A shares in amounts that reflect management’s view of our financial performance. However, no assurance can be given that any dividends, whether quarterly or otherwise, will or can be paid. Because we are a holding company that owns intermediate holding companies, the funding of each dividend, if declared by the board of directors, will occur in three steps, as follows:

		first, we will cause Fortress Operating Group to make a distribution to all of its unitholders, on a pro rata basis; that is, the limited partnerships making up Fortress Operating Group will make distributions to their respective partners, as follows:

		•	in the case of the Operating Entities, distributions will be made to FIG Corp. and the principals on a pro rata basis

		•	in the case of Principal Holdings, distributions will be made to FIG Asset Co. LLC and the principals on a pro rata basis;

		second, we will cause our intermediate holding companies to distribute to us, from their net proceeds, amounts equal to the aggregate dividend declared by our board of directors; and

		third, we will distribute the proceeds received by us to our Class A shareholders on a pro rata basis. Our Class B shareholders are not entitled to any dividends.

		If Fortress Operating Group units are issued to other parties, such as employees, such parties would be entitled to distributions by Fortress Operating Group as partners described above.

22

		We believe that the payment of dividends will provide transparency to our Class A shareholders and will impose upon us an investment discipline with respect to new products, businesses and strategies.

		As a holding company, our ability to pay dividends to our Class A shareholders will be subject to the ability of our subsidiaries (including our two wholly owned intermediate holding companies that hold our Fortress Operating Group units) to provide cash to us. The declaration and payment of dividends by us will be at the discretion of our board of directors and will depend on, among other things, cash available for distributions, general economic and business conditions, our strategic plans and prospects, our financial results and condition, contractual, legal and regulatory restrictions on the payment of distributions by us or our subsidiaries, and such other factors as our board of directors considers to be relevant.

Principals’ exchange rights		At any time and from time to time, each principal will have the right to exchange each of his Fortress Operating Group units (together with the corresponding Class B share) for one of our Class A shares. We have reserved for issuance 312,071,550 Class A shares, corresponding to the number of existing Fortress Operating Group units held by our principals. To effect an exchange, a principal must simultaneously exchange one Fortress Operating Group unit – being an equal limited partner interest in each Fortress Operating Group entity. In connection with any exchange of Fortress Operating Group units, the principal will receive a right, under a tax receivable agreement, to receive 85% of the value of the applicable tax benefit in cash when FIG Corp. or FIG Asset Co. LLC (on behalf of any affiliated corporation that holds an interest in a Fortress Operating Group entity) actually realizes certain tax savings resulting from the increase in tax deductions, as well as an increase in the tax basis of other assets, of certain Fortress Operating Group entities resulting from the exchanged units. See ‘‘Certain Relationships and Related Party Transactions — Tax Receivable Agreement.’’ As a principal exchanges his Fortress Operating Group units, our interest in the Fortress Operating Group units will be correspondingly increased and his corresponding Class B shares will be cancelled.

Proposed New York Stock Exchange symbol		‘‘FIG’’

Risk factors		Please read the section entitled ‘‘Risk Factors’’ beginning on page 30 for a discussion of some of the factors you should carefully consider before deciding to invest in our Class A shares.

23

References in this section to the number of our Class A shares and our Class B shares to be outstanding after this offering, and the percent of our voting rights held, exclude:

	•	312,071,550 Class A shares issuable upon exchange of Fortress Operating Group units by our principals;

	•	5,142,900 Class A shares issuable upon exercise of the underwriters’ option to purchase additional Class A shares from us, if exercised; and

	•	interests granted under our equity incentive plan, consisting of:

	•	50,920,503 restricted Class A share units to be granted to certain employees and 102,858 restricted Class A shares to be granted to directors in connection with the consummation of this offering; and

	•	an additional 63,976,639 interests reserved for issuance under our equity incentive plan, subject to automatic increases annually.

Class A shares will be issued to persons holding Fortress Operating Group units, including our principals, when they wish to exchange those units, as described above in ‘‘Structure and Formation of our Company—Certain Attributes of our Structure’’.

We expect to grant awards to employees and directors in connection with this offering, which will take the form of grants of restricted Class A shares and restricted Class A share units, as described below in ‘‘Management—Equity Incentive Plan’’.

In the event the underwriters exercise their option to purchase additional Class A shares, the economic interest and voting power of holders of our Class A shares as a group and our interest in the Fortress Operating Group will increase by 1.0 percentage point.

24

SUMMARY HISTORICAL AND UNAUDITED PRO FORMA FINANCIAL AND
OPERATING INFORMATION

Summary Historical Financial Information

The following table sets forth certain summary financial information on a historical basis.

The summary historical financial information set forth below as of December 31, 2005 and 2004, and for each of the three years in the period ended December 31, 2005, has been derived from our audited combined financial statements. The summary historical financial information set forth below as of September 30, 2006, and for the nine month periods ended September 30, 2006 and 2005, has been derived from our unaudited interim combined financial statements. The summary historical financial information set forth below as of December 31, 2003, 2002 and 2001, and for each of the two years in the period ended December 31, 2002, and as of September 30, 2005 has been derived from our unaudited accounting records prepared on a consistent basis with the financial statements described above. The unaudited interim combined financial statements include all adjustments (consisting of normal, recurring adjustments) that are, in the opinion of management, necessary for a fair presentation of our financial position and results of operations for the periods presented. The interim results of operations are not necessarily indicative of operations for a full fiscal year.

The information below should be read in conjunction with ‘‘Management’s Discussion and Analysis of Financial Condition and Results of Operations’’ and the combined financial statements and notes thereto included in this prospectus.

25

Summary Historical Combined Financial Information
(in thousands)

			Nine Months Ended September 30,												Year Ended December 31,
			2006						2005						2005						2004						2003						2002						2001
Operating Data
Revenues
Management fees and incentive income from affiliates and other revenues				$	255,017					$	116,990					$	284,313					$	128,671					$	47,557					$	13,720					$	9,092
Interest and dividend income – investment company holdings					810,381						387,232						720,549						222,707						172,759						64,097						87,325
					1,065,398						504,222						1,004,862						351,378						220,316						77,817						96,417
Expenses					804,828						384,564						646,692						198,403						81,627						33,579						10,829
Other Income
Gains – investment company holdings					2,681,754						1,416,537						2,903,978						881,658						123,276						37,624						54,150
Gains – other investments					94,873						31,737						37,181						20,512						9,120						—						—
Earnings from equity method investees					3,412						9,015						10,465						14,616						4,762						2,334						6,597
					2,780,039						1,457,289						2,951,624						916,786						137,158						39,958						60,747
Income before deferred incentive income, non- controlling interests in income of consolidated subsidiaries and income taxes					3,040,609						1,576,947						3,309,794						1,069,761						275,847						84,196						146,335
Deferred incentive income					(475,655	)					(224,263	)					(444,567	)					(104,558	)					(17,487	)					(6,542	)					(12,710	)
Non-controlling interests in income of consolidated subsidiaries					(2,403,346	)					(1,316,885	)					(2,662,926	)					(847,365	)					(216,594	)					(67,306	)					(118,547	)
Income before income taxes					161,608						35,799						202,301						117,838						41,766						10,348						15,078
Income tax expense					(8,898	)					(3,130	)					(9,625	)					(3,388	)					(1,495	)					(920	)					(446	)
Net income				$	152,710					$	32,669					$	192,676					$	114,450					$	40,271					$	9,428					$	14,632

26

			As of September 30,												As of December 31,
			2006						2005						2005						2004						2003						2002						2001
Balance Sheet Data
Investment company holdings, at fair value				$	16,564,782					$	8,597,796					$	10,582,109					$	5,365,309					$	2,036,107					$	1,047,424					$	611,158
Other investments					547,657						440,548						451,489						48,444						52,879						51,556						54,947
Cash, cash equivalents and restricted cash					569,447						306,752						288,363						179,727						41,661						15,907						2,858
Total assets					18,497,040						9,682,896						11,863,938						5,796,733						2,212,564						1,165,075						675,272
Debt obligations payable					3,128,770						1,672,985						2,250,433						928,504						226,205						36,936						36,250
Deferred incentive income					1,061,519						365,560						585,864						141,277						36,739						19,252						12,710
Total liabilities					4,727,484						2,295,127						3,343,262						1,306,021						339,031						78,804						53,730
Non-controlling interests in consolidated subsidiaries					13,841,723						7,353,697						8,397,167						4,405,835						1,836,163						1,046,896						599,827
Members’ equity (deficit) including accumulated other comprehensive income (loss)					(72,167	)					34,072						123,509						84,877						37,370						39,375						21,715

27

Summary Unaudited Pro Forma Financial Information

The following table sets forth our summary unaudited pro forma financial information as of September 30, 2006 and for the year ended December 31, 2005 and the nine month periods ended September 30, 2006 and 2005, which has been derived from our unaudited pro forma financial information included elsewhere in this prospectus. The summary unaudited pro forma statement of operations information is presented as if the Transactions had been consummated on January 1, 2005. The summary unaudited pro forma balance sheet information is presented as if the Transactions had been consummated on September 30, 2006.

The pro forma adjustments are based upon available information and assumptions that we believe are reasonable. The summary unaudited pro forma financial information is presented for illustrative and informational purposes only, and is not necessarily indicative of what our actual financial position or results of operations would have been had the Transactions occurred on the dates or during the periods presented, nor does it purport to represent the results of any future periods.

The information below should be read in conjunction with ‘‘Management’s Discussion and Analysis of Financial Condition and Results of Operations’’ and the pro forma financial information and notes thereto included elsewhere in this prospectus, including ‘‘Unaudited Pro Forma Financial Information’’. For a description of the Transactions, see ‘‘Our Structure — The Transactions’’.

The pro forma weighted average number of Class A shares outstanding used to compute diluted pro forma net loss per Class A share assumes that each of our Fortress Operating Group units, including units outstanding not subject to forfeiture, units outstanding subject to forfeiture among principals and unvested restricted units granted to employees, have been exchanged for newly issued Class A shares on a one-for-one basis and includes unvested restricted Class A shares granted to employees, in all cases as if all such shares have been outstanding from the beginning of the respective period.

28

Summary Unaudited Pro Forma Financial Information
(in thousands, except per share data)

			Nine Months Ended September 30,												Year Ended December 31,
			2006						2005						2005
Pro Forma Operating Information
Revenues
Management fees and incentive income from affiliates and other revenues				$	325,124					$	168,149					$	416,406
Expenses					1,069,023						969,948						1,325,598
Other income
Gains – other investments					49,744						10,378						13,721
Earnings from equity method investees					46,230						24,622						40,063
					95,974						35,000						53,784
Loss before non-controlling interests in income of consolidated subsidiaries and income taxes					(647,925	)					(766,799	)					(855,408	)
Non-controlling interests in loss of consolidated subsidiaries					502,695						596,654						663,894
Loss before income taxes					(145,230	)					(170,145	)					(191,514	)
Income tax benefit					6,255						6,373						7,173
Pro forma net loss				$	(138,975	)				$	(163,772	)				$	(184,341	)
Pro forma net loss per Class A share, diluted				$	(1.63	)				$	(1.86	)				$	(2.15	)
Weighted average number of Class A shares outstanding, diluted					401,429						401,429						401,429

As of September 30, 2006

Pro Forma Balance Sheet Information